Beyond the acute vulnerability to any weakening of Credit growth, the Chinese Bubble economy is demonstrating obvious signs of imbalances and price distortions. And that’s a problem for the US and everywhere else.
The Fed’s balance sheet might inflate to $10 trillion.
The extraordinary $575 billion M2 growth over the past 22 weeks (that receives zero attention) was the second strongest (22-week) monetary expansion in U.S. history, trailing only 2011’s “QE2” period.
A serious globalized de-risking/deleveraging episode would require multi-Trillion expansions of Federal Reserve and global central bank balance sheets.
Instability in the multi-trillion repurchase agreement marketplace generates intense interest. This crucial market for funding levered securities holdings is critical to the financial system’s “plumbing.”
Of the crowd piling into bond ETFs, how many are unaware of how quickly money can be lost in “safe” bonds?
There is this dreadful feeling that things are advancing toward some type of cataclysm.
The first “Bomb” hit at 8:02 am eastern.
China is now only a faltering apartment Bubble away from a period of major economic upheaval and acute financial instability. It’s just one problem for financial markets worldwide. Doug’s overview of the week in world bubble finance is its usual tour de force.
Global markets were shocked Beijing would interject the renminbi into tit-for-tat trade retaliation. Trade war morphing into currency war?